TJ_Comp 20_TB_Ch15

TJ_Comp 20_TB_Ch15 - Chapter 15CONSIDERATION TRUE/FALSE 1....

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Unformatted text preview: Chapter 15CONSIDERATION TRUE/FALSE 1. The concept of consideration has clearly been phased out of the law. ANS: F MSC: AACSB Analytic 2. Consideration is what a promisor demands and receives as the price for the promise. ANS: T MSC: AACSB Analytic 3. In a bilateral contract, which is an exchange of promises, each promise is consideration for the other promise. ANS: T MSC: AACSB Analytic 4. Consideration always must be an act or the promise to perform an act. ANS: F MSC: AACSB Analytic 5. In most cases, consideration will result in a benefit to the promisor and imposition of some burden or detriment to the promisee. ANS: T MSC: AACSB Analytic 6. One promise may serve as consideration for many return promises. ANS: T MSC: AACSB Analytic 7. A promise to make a gift is enforceable. ANS: F MSC: AACSB Analytic 8. A completed gift cannot be rescinded for lack of consideration. ANS: T MSC: AACSB Analytic 9. True consideration occurs only when the value of one promise is equal to the value of the promise giv- en by the other party. ANS: F MSC: AACSB Analytic 10. The promise of a creditor to forbear collecting a debt is consideration for a promise by the debtor to modify the terms of the transaction. ANS: T MSC: AACSB Analytic 11. Forbearance may constitute consideration. ANS: T MSC: AACSB Analytic 12. An unenforceable promise will constitute consideration as long as the parties to the contract appear to be in agreement. ANS: F MSC: AACSB Analytic 13. A promise by a coat factory to pay $0.25 per button for any buttons that it orders from the ABC Button Company constitutes consideration. ANS: F MSC: AACSB Analytic 14. A binding contract cannot contain a cancellation provision. ANS: F MSC: AACSB Analytic 15. Arresting 100 persons guilty of crime can be consideration for the promise made to a police officer to pay a bonus for making such arrests. ANS: F MSC: AACSB Analytic 16. In a contract for the sale of goods, any modification made by the parties to the contract must be sup- ported by consideration to be binding. ANS: F MSC: AACSB Analytic 17. There is consideration for a partial payment by a debtor in satisfaction of a debt when the payment is made before the debt is due. ANS: T MSC: AACSB Analytic 18. If a claimant knows that there is no merit in the claim itself but is using the claim to force an issue, a settlement of the claim based on partial payment lacks consideration. ANS: T MSC: AACSB Analytic 19. If a merchant receives and cashes a check for partial payment of a debt and the check bears the nota- tion that the amount is in full payment of a disputed sum, the total debt is released. ANS: T MSC: AACSB Analytic 20. Sara Student wished to pay off her $5,000 student loan. If she sends in a check for $3,000 and the creditor cashes the check, the debt will be fully satisfied provided the check is marked "paid in full." ANS: F MSC: AACSB Analytic 21. In a composition of creditors, the various creditors of a single debtor mutually agree to accept a frac-...
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TJ_Comp 20_TB_Ch15 - Chapter 15CONSIDERATION TRUE/FALSE 1....

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